From Bloomberg:
“U.S. stocks retreated, with the Standard & Poor’s 500 Index falling a third day, as airline stocks tumbled after escalating violence in Iraq pushed oil prices higher while data on retail sales and jobs missed estimates.”
GDX is reviewed from a bigger picture weekly view after holding its ‘HUI 205’ parameter of 22 as support. This is defined as the bottom of a theoretical right side shoulder to a long potential Inverted Head & Shoulders bottoming pattern that is now about a year old.
We have been talking about how there had been no bubble in US stocks and how the economy is doing just fine. We have also been talking about how the bubble is in policy and that the economy and stock bull market have been created – yes, like Frankenstein’s monster once again – out of this policy bubble.
Enter economist Joseph LaVorgna of Deutche Bank… Fed needs to start raising rates, top forecaster says.
Will wonders never cease? As you may know, I read the financial MSM to get a feel for what the casual market participant is reading, what the majority is being told is the truth. Usually it is some combo of self-promoters and agenda (sometimes political) driven bulls and bears.
A picture of GDXJ vs. GDX to go with this morning's ETF update. GDXJ leads the rallies and in breaking above the moving averages yesterday and today, it is leading…
Key ETF charts are a snapshot to current technicals, not comprehensive technical analysis.
GLD bumped above the lower end of resistance yesterday and is support for any continuing S/T rally activity. The big test is in the 123 to 125 area and the nose of the former Symmetrical Triangle.
Silver continues to lead gold and that is generally a positive. The ratio is sneaking above the MA 50’s, RSI is over 50 and AROON just went green.
Similarly (to the INTC idea), a smaller yet high quality Semiconductor company is LSCC. It has a valuation that is ahead of most, due to its quality status and solid…
I remind you that any NFTRH+ trades are your responsibility solely and these trades may not be revisited any time soon if at all. They are simply ideas for you…
ETF daily charts are a snapshot of current technicals, not a comprehensive technical review.
GLD has lost support after spilling out of the Symmetrical Triangle. Last week it was at the 62% Fib retrace and this week that is in the rear view window. Still bearish.
The following is one of a wide range of analytical topics covered in NFTRH 293’s 35 pages this week, much of which is straight ahead technical analysis. But the T Bond market is usually central to an overall macro view at any given time. This segment is not meant to provide actionable direction (other than perhaps to prepare for a potential rise in T bonds yields), it is meant to dig into the mechanics beneath the financial markets in an effort to have people consider that there is much more going on with markets than simple nominal TA or conventional fundamental analysis (PE ratios, growth metrics, reported economic data, etc.) can account for.
US Treasury Bonds
Yields on long-term Treasuries have continued to decline in line with our view that was contrary the ‘Great Rotation’ (out of bonds) hype. The [30-year] especially is now close to support and the next play seems like it could be rising yields and declining T bonds.
The 30-year ‘Continuum’ view above makes the simple case that players had to be put offside believing in the ‘Great Rotation’ at 4% yields. The nearly half-year decline since then has now satisfied the chart as yields have come to our 3.1% to 3.2% target range, where there is support.
Well, Loretta Mester looks a little hawkish anyway. She also looks a little like... To which I'd refer back to my first public article ever written back in the quaint…
GDX made two high volume down days and is bouncing. This chart attempts to gives short term parameters and technical perspective.
This chart shows HUI dropping through the 205 parameter today. While it is technically at support (and getting sufficiently over sold) as you know, without fundamental incentive, I am not near the view I had in Q4 2008 (buy!). No way, no how. Not without a fundamental case that is engaged and measurable. This update then is simply a technical status check on HUI for those interested.
“The real issue is that the Fed has expanded its tool kit so dramatically…” –Andrew Huszar
In line with our theme of outlandish and immoral (in my opinion) Fed policy a former Fed official calls QE a backdoor bailout of Wall Street, which anyone with two functioning brain cells knows to be the case. The Andrew Huszar Op/Ed (Wall Street Journal) Confessions of a Quantitative Easer is I suppose old news, but it illustrates what we have been hammering on for so long now; that Fed policy is serving to pump the stock market and pump up the wallets of asset owners.
QE gets about 10 times the notoriety of ZIRP, but I’ll still maintain that it is this evil tool in the Fed’s ‘tool kit’ that is the main and continuing blight on the system as it not only rewards asset owners and speculators, but punishes those least able to speculate due to limited funds.
Please review this chart again and behold the rigged market. Anyone arguing that the bull market in US stocks is normal is being intellectually dishonest. Yet like agent Mulder I want to believe in the healthy bull story*, but I have to believe the data that has drawn the lines on the chart above.